ESMA final reports on the Prospectus Regulation and civil prospectus liability

The European Securities and Markets Authority (ESMA) has published two final reports providing technical advice to the European Commission (EC). The final report on prospectus regulation forms part of ESMA's technical advice under the EU Listing Act, which seeks to make EU capital markets more accessible, especially for small and medium-sized enterprises (SMEs).

The report covers:

• Draft technical advice on the standardised format and sequence of the prospectus, the base prospectus and the final terms.
• Proposed ESG disclosure annexes for non-equity securities marketed with ESG features, aligning with the EU's sustainability objectives.
• Draft technical advice to the scrutiny of information in prospectuses as well as advice relating to the procedures for the approval of a prospectus.
• Proposals to update the RTS under Commission Delegated Regulation (EU) 2019/979 (CDR) on metadata to align with changes introduced by the EU Listing Act and regarding the implementation of the European Single Access Point (ESAP).

The final report on civil prospectus liability responds to a mandate under Article 48(2) of the Prospectus Regulation, which required the EC to assess whether further harmonisation of the provisions on prospectus liability is required.

The report covers:

• Feedback of ESMA's call for evidence on civil prospectus liability which indicates that the current regime is generally considered well balanced and reform is not necessary at this stage.
• An update of the relevant sections of ESMA's 2013 report on prospectus liability, relating to civil liability.
• Legal and comparative analysis of civil prospectus liability, including case law and stakeholder perspectives.
• Comparison to the Markets in Crypto-Assets Regulation.
• Recommendations on: (i) eligible claimants; (ii) degree of culpability; (iii) calculation of damages; (iv) burden of proof; (v) safe harbour rules; (vi) expiry of claims; (vii) applicable law; (viii) impact of third countries' laws; and (ix) class action lawsuits.

ESMA has submitted both reports to the EC. Regarding the proposed updates under the CDR on metadata, the EC will decide within three months whether it will choose to adopt the RTS, with the option to extend that period by a month. Regarding the technical advice on civil prospectus liability, the EC is required to present a report to the European Parliament and Council by 31 December.

Return to main website.